Budget to Confirm Full Dollarisation

ACTING Finance minister Patrick Chinamasa will on
Thursday announce a budget in which government is making provision for the
holding of elections, official sources have said.

The sources
yesterday said the budget, which is being formulated with "active input"
from the Reserve Bank and the Joint Operations Command, would effectively
dollarise the economy.It will, among other far-reaching measures, make
all taxes for individuals and corporates, and all duties, payable in foreign
currency. It is also expected to set out modalities for school fees payments
in foreign currency in addition to spelling out new policy directives to
operate a dollarised economy.

Government, the sources said,
should in the budget introduce special coupons to be used to pay civil
servants. The coupons will have US dollar equivalent face values. This is
being proposed to mitigate the absence of forex to pay government
workers.

The coupons would be redeemable at designated
shops.

Information to hand shows that a committee dominated by
security personnel, the RBZ, officials from the Ministry of Finance and the
Zimbabwe Revenue Authority has since November been working on the budget in
which allocations will be set aside for the staging of an election later
this year.

Last month at the Zanu PF people's conference in
Bindura, President Mugabe told his supporters to prepare for elections. The
opposition has lately also been warming up to the idea of facing Zanu PF in
fresh elections.

Details on the amount being reserved for
the election could not however be obtained at the time of going to
press.

Zimbabwe Electoral Commission spokesman Utoile
Silaigwana said the commission was prepared to hold elections at any time
that President Mugabe made a proclamation.

"I am sure that
you are aware that we have never failed to hold elections. Once a
proclamation is made, we know we will get the funding," he
said.

Silaigwana said they would not incur too many
expenses as the commission had adequate stationery and manpower to conduct
elections.

He however could not give the cost of the elections
held in March last year saying he needed to check with the finance
department to get the figures.

The sources said to raise
revenue, government would in the budget propose the payment of taxes in
foreign currency. This, they said, would effectively dollarise the
economy.

A formal agreement is required with the US authorities
before a country can formally adopt the greenback as its currency. Zimbabwe
however intends to use multiple currencies to transact
business.

Officials from the central bank and government have
lately been on a foray to Russia and North Africa to raise funding to
finance state activities. There is market talk that government has mortgaged
mineral reserves to Russian investors for hard currency.

On
school fees, government could allow trust schools to collect up to 90% of
fees in foreign currency while government urban schools could be given the
green light to collect up to half in foreign currency. Rural schools would
continue to offer tuition in Zimbabwe dollars.

The drafters of
the budget have taken on board proposals from the Confederation of Zimbabwe
Industries (CZI) for government to introduce foreign currency-indexed tax
bands and a fuel levy in a drive to raise revenue for the cash-strapped
government.

The CZI in its contribution to the budget
formulation said government should introduce the new measures in order to
boost its shrinking revenue base and promote employee
retention.

The CZI also recommended the slashing of customs
duties levied on luxury goods.

These proposals, the
organisation argued, follow an inevitable drive towards the full
dollarisation of the country's battered economy.

However, with
independent estimates suggesting that 80% of the economy is now informalised
on the back of heightened corruption in government, this proposal could fail
to boost the state's declining revenues.

"Government should set
tax bands in US dollars with the threshold at poverty datum line levels and
maximum tax rate of 20% for those earning over US$1 000 per month," read the
proposal. "This will enable business to be more competitive on tax payments
and help skills retention."

This has been taken on board by
government, a source said.

The confederation said the
introduction of a foreign currency-indexed fuel levy would assist in
balancing government finances.

"This tax must be set in line
with regional practice to ensure that we remain competitive as a nation,"
the CZI suggested.

The central bank has, however, continued introducing
new notes with the latest being last Friday's issuance of the historic $100
trillion bill.

"The primary mechanism that we are recommending
is an interim dollarisation of the economy," read the CZI proposal. "This is
not a straightforward process and needs to be carefully managed. In
particular we believe that there are not enough United States dollars in
circulation to sustain meaningful economic activity. To that end the
Zimbabwe dollar will need to be maintained as a parallel
currency.

For the Zimbabwe dollar to fulfil its role as an
effective medium of exchange, it is vital that the monetary base is frozen.
If this is done then the Zimbabwe dollar will quickly find a level against
international currencies and then keep this level."

The CZI
said the country needed to engage "international expertise" in dollarising
the economy - a decision the organisation argued would prevent government
utilities and private companies from charging "unrealistic"
tariffs.

Last year, leading American monetary reformist
Professor Steve Hanke advised Zimbabwe to use the South African rand in what
he termed the "Randisation" of the economy and the establishment of a
currency board to replace the Reserve Bank.

The Reserve
Bank, the CZI proposed, should also reduce statutory reserves before
freezing the monetary base to reduce the gap between borrowing and lending
rates.

In an interview on Wednesday, CZI president Kumbirai
Katsande doubted government's sincerity in implementing fiscal policies that
promote manufacturing despite numerous policy submissions by various
stakeholders.

The current policy environment, according to the
CZI, was "highly penal" to formal businesses and has led to a collapse of
formal business activity and a mass informalisation of the
economy.

"There is a misunderstanding here over government's
role," Katsande said. "We are faced with a fluid situation that requires
speed. Unfortunately this has not been the case with past policies. Its role
should facilitate orderly trading and business growth."

Turning to the monetary policy, the CZI wants an immediate review of the
Reserve Bank of Zimbabwe Act with the view of creating an "orthodox
independent central bank" guided by international practice.

Currently some critics blame the central bank for formulating "populist
policies" skewed in favour of the ruling Zanu PF party.

Mugabe Seeks Sadc Mandate to Form Government

PRESIDENT Robert Mugabe will seek the mandate of the
Sadc Summit in South Africa on Monday to form a government excluding MDC
leader Morgan Tsvangirai with a promise to hold fresh elections within two
years, the Zimbabwe Independent has learnt.

The summit was
called after Sadc chairman, South African President Kgalema Motlanthe,
Mozambican leader Amando Guebuza and Zimbabwe unity government deal-broker
Thabo Mbeki failed on Monday in Harare to resolve the political stalemate in
Zimbabwe.The deal signed last September between Zanu PF and the two
MDC formations has been stalled because of haggling over posts between
Mugabe and Tsvangirai.

Sources in both Zanu PF and the MDC-T
told the Independent that the deal had "already collapsed" and the two
protagonists were already plotting the way forward.

Mugabe, the
sources said, was confident that Sadc would not overrule its decision of
November 9 last year that a new government be formed "forthwith", with Zanu
PF and the MDC-T co-managing the Ministry of Home Affairs.

The
84-year-old Mugabe, the sources said, had during his annual leave been
consulting Zanu PF bigwigs on the formation of a government after he
concluded that the deal would not be consummated becausethey were
poles apart from Tsvangirai.

"To Mugabe, Monday's Sadc summit is a
mere formality," one of the sources in Zanu PF said. "He does not expect
Sadc to overrule its position of November 9 and at the same time he is not
expecting Tsvangirai to move from his stance. No more concessions will come
from Zanu PF. Mugabe will ask Sadc to give him the mandate to form a new
government."

The sources said Mugabe, if granted the mandate, would
initially leave cabinet posts vacant for both MDCs before filling them after
a while and then preparing for fresh elections.

Mugabe and
Justice minister Patrick Chinamasa last year said if the unity government
deal collapsed, new harmonised elections would be held.

Sources in
the MDC-T said Tsvangirai was pessimistic that the Sadc summit would break
the deadlock and lead to the formation of an inclusive
government.

The sources said Tsvangirai had no credible "Plan
B" and intended to launch a diplomatic campaign in the region and abroad
against Mugabe if he goes ahead and forms a government that excludes the
MDC-T.

"It is clear in our party that Sadc will not move. The deal
is set to collapse on our watch," a member of the MDC-T national executive
said. "However, Mugabe will have legitimacy problems if he goes it
alone.

Tsvangirai will use the lack of legitimacy to discredit the
government in the region and internationally."Mugabe's government
failed to get recognition in Sadc, the African Union and internationally
after last year's presidential election resulting in Sadc-mediated talks
between Zanu PF and the two MDC formations, which culminated in the signing
of the inclusive government pact on September 15 2008.

Chinamasa yesterday declined to take questions on the unity deal saying he
would address a press conference today.

"All the issues you are
raising will be clarified at the press conference," he said. "You will get
the answers then."

In a statement after visiting cholera patients
in Budiriro yesterday, Tsvangirai said Zanu PF was standing in the way of a
political settlement.

"MDC was not being obstructionist in the
dialogue process, but it was Zanu PF which had to accept the logic and
justness of the MDC's compelling case for equity," the statement
read.

During Monday's meeting, Mugabe rejected Tsvangirai's
conditions for joining his government, saying his demands were
"unacceptable".

Tsvangirai had demanded control of the "key" Home
Affairs, Finance, Information, Agriculture and Local Government ministries.
He had proposed that Mugabe take Defence, National Security, Justice,
Foreign Affairs and Land. He also demanded the release of political
prisoners.

Mugabe rejected Tsvangirai's proposals insisting the
issue of portfolios had been resolved and there was no need to "reopen"
it.

Motlanthe, Mbeki and and Guebuza reportedly pushed hard for a
compromise, reminding Mugabe and Tsvangirai of Zimbabwe's deepening
humanitarian crisis and its collateral damage on the region, but failed to
move the bitter rivals.

Mugabe insisted that he had complied
with Sadc recommendations to put measures in place to form an inclusive
government, but Tsvangirai had disagreed.

Farm Workers Dwindle

Thursday, 22 January 2009 21:04FARM
workers, bearing the brunt of a poor preparation for the 2008/9 agricultural
season, have dwindled by more than 25%.

This is farmers after
farmers have abandoned fields to engage in other economic activities to
sustain themselves.

Shortages of inputs and poor planning have
impacted negatively on the agricultural sector, amid predictions that the
season would be a complete write off.

This has worsened the
plight of farm workers countrywide as hunger and low wages take their
toll.

General Agriculture and Plantation Workers Union of
Zimbabwe secretary-general Gertrude Hambira told the Zimbabwe Independent
this week that more than 40 000 farm workers had abandoned their jobs
because of poor wages and working conditions.

"We are
alarmed at the rate we are losing our membership. Many farm workers have
turned to other means of survival such as gold panning and cross border
trading," Hambira said. "Our numbers have dwindled from more than 120 000 to
less than 80 000 within a period of one year and we fear that this could
worsen."

She said employers, particularly the resettled
farmers, were paying only the stipulated $5 billion a month and were failing
to provide workers with food.

Hambira said her union was
inundated by pleas for humanitarian assistance from the workers, some of
whom she claimed were now surviving on mangoes and wild
fruits.

She said the situation was worsened by the current
deadlock between the union and farmers on the need to pay the labourers in
foreign currency.

Hambira said the majority of employers were
refusing to pay in hard currency arguing that as newly resettled farmers
they could not afford to do so.

"There are some (farmers)
refusing to pay saying that they are new farmers. How can one continue to be
a new farmer from the year 2000? It is just an excuse not to pay workers,"
she said.

The workers are demanding to be paid US$15 monthly
plus basic commodities, which include 20kg of maize, four litres of cooking
oil, three bars of washing soap, 4kg sugar and 4kg salt.

The employers, Hambira claimed, were prepared to pay US$2 and provide a
bucket of maize, two litres of cooking oil and a packet of
salt.

"We are far apart in terms of what we are putting on the
table as a suitable wage for our members. For one to offer to pay US$2 as
payment shows either that person has lost their sanity or that they are just
greedy and insensitive," she fumed.

Hambira warned that the
failure by employers to pay reasonable wages would further destabilise the
agricultural sector, which is already going through a very difficult
period.

She said the union had received reports of unrest in
some parts of the country such as Mashonaland West and Mashonaland Central
where farm workers were refusing to accept local currency as
wages.

The Zimbabwe Farmers Union has weighed in to support
farm workers getting paid in hard currency and urged the central bank to
allow everyone to carry out transactions in hard currency without having to
go through the tedious process of applying for a licence.

ZFU vice-president Edward Raradza told the Independent that farmers could
only pay their workers in hard currency if they were allowed to trade their
produce in foreign currency.

He said it did not make sense to
apply for a licence to trade in foreign currency when "mangoes and
vegetables" were being sold in hard currency by street
vendors.

"The Reserve Bank should allow farmers to sell their
produce in foreign currency so that we can pay our workers in the same
currency," Raradza said. "The situation on the ground is that everything has
been dollarised."

The union and employers are set to meet
today in an attempt to break the deadlock.

Zinwa Workers go on Strike

Thursday, 22 January 2009 21:02
MAINTENANCE workers at the Zimbabwe National Water Authority (Zinwa) this
week downed tools to protest poor working conditions, worsening the plight
of residents in the western parts of the capital who have gone for two weeks
without water.

Zinwa workers told the Zimbabwe Independent that
they went on strike on Monday after their employer refused to supply them
with protective clothing when repairing burst water and blocked sewer
pipes.

"We have repeatedly told management to supply us with
protective clothing but it seems our calls are falling on deaf ears," said
one of the employees who requested anonymity.

The workers
said apart from failing to provide protective clothing, they also did not
have propertools to carry out maintenance work.

Zinwa's water supplies director Douglas Kagoro yesterday declined to comment
on the strike and water supply situation in the capital saying he was
attending consultative meetings and that a press statement would soon be
issued on the matter.

Residential areas which include Glen
Norah, Glen View, Budiriro, Belvedere and some parts of the central business
district, have gone for two weeks without water after a main pipe
burst.

The water crisis has also affected operations at the
Budiriro Polyclinic, which is a main referral centre for the cholera
outbreak.

The United Nations Children's Fund (Unicef) has
intervened in the affected areas by suppling water to residents in Budiriro,
Glen View and Glen Norah.

However, the supplies were not
enough to cater for all residents and this has resulted in some residents
digging open wells.

Meanwhile, cholera figures released
yesterday by the World Health Organisation (WHO) revealed that the epicentre
of the outbreak seems to be moving away from Harare to other districts of
the country.

Cumulative infections by Monday had reached 46 606
patients while at least 2 484 deaths had been recorded as a result of the
water-borne disease.

The cholera outbreak, which started in
August last year, has spilled across the borders of neighbouring countries
such as South Africa, Mozambique and Malawi where several deaths have been
reported.

Election Challenge Postponed to Next Month

Thursday, 22 January 2009
20:59MINORITY opposition leader Justin Chiota's case seeking the
nullification of last year's presidential election and the ongoing talks on
the formation of an inclusive government was yesterday postponed by the
Supreme Court to next month.

The court moved the case to
February 19.

Chiota, the president of the Zimbabwe People's Party,
and Daniel Shumba, leader of the United People's Party, were last year
barred by the Zimbabwe Electoral Commission (ZEC) from participating in the
March 29 poll.

The duo approached the Supreme Court seeking the
reversal of the disqualification.

The court ruled on August
1 2008 that their disqualification by ZEC was illegal.

On
the strength of that ruling, Chiota lodged his latest
application.

Chiota, an advocate and businessman, wants the
court to declare null and void the March election and order a fresh poll
within 90 days and also to bar and interdict President Robert Mugabe and the
leaders of the two MDC formations, Morgan Tsvangirai and Arthur Mutambara,
from proceeding with talks to constitute an inclusive
government.

A conclusion in this constitutional case would
determine the fate of the power sharing talks brokered by Sadc and the
African Union.

Tsvangirai won the first round of elections but
without an outright win required by electoral law. This outcome led to
Mugabe's re-election after the opposition leader pulled out of the election
race citing an orgy of violence unleashed on his
supporters.

ZEC chairman George Chiweshe, Mugabe, Tsvangirai
and independent presidential candidates in the March poll, Simba Makoni and
Langton Towungana, are cited as respondents in Chiota's
application.

Zanu PF, MDC Playing Power Games - Makoni

Thursday, 22 January 2009
20:53LOSING presidential candidate in last year's election and leader
of the Mavambo/Kusile/Dawn movement, Dr Simba Makoni, says Zimbabwe's
current political impasse can be resolved by forming a Transitional National
Authority.

Our news editor Constantine Chimakure put questions
to Makoni this week on his movement and the political crisis in the country.
Below are excerpts.

Chimakure: Dr Makoni, can you give us an
update on the transformation of Mavambo into a political
party?

Makoni: At the beginning of August 2008 we set up a
steering committee tasked specifically to guide the transformation of
Mavambo/Kusile/Dawn from a movement of volunteers into a political party. By
the end of 2008 a draft constitution had been produced and distributed for
examination and critique among activists of the movement countrywide.
Currently, our main focus is on setting up interim structures at the
provincial, district, ward and local levels, to manage the consultations
leading to party formation and initiate membership
mobilisation.

Chimakure: When is the party going to be launched
and how formidable do you think it will be given the dominance of both Zanu
PF and MDC?

Makoni: We plan to launch the party before the end
of the first quarter of 2009.As to how formidable the party will
be, I believe that given a normal political environment, we will quickly
grow to be the biggest party in the country and form the next government.
People are sick and tired of the politics of power that both Zanu PF and the
MDC are engaged in. They feel abandoned and betrayed by those who are
fighting for power and positions for themselves while the country
burns.Feedback from across the country suggests that the people have
lost faith in the de facto two-party system we have in Zimbabwe now. They
believe that our movement offers a credible and viable basis for an
alternative; the third way to a government committed to serving the
people.We do not believe that the MDC-Tsvangirai and Zanu PF are still
dominant in terms of popular appeal; they were dominant up to March 29 2008.
Zanu PF's behaviour during the run-off campaign inflicted immense pain on
the people; and the MDC-Tsvangirai and Zanu PF's conduct after September 15
has not only led people into despair and disdain, but also resentment and
rejection.

Chimakure: It is common cause that the votes you
obtained in the presidential election if they had gone to either President
Robert Mugabe or Morgan Tsvangirai, an outright winner would have emerged.
Don't you think that you should have been part to the power-sharing
talks?

Makoni: Yes, as a purely arithmetic exercise, if the
votes cast for me were added to either Mugabe or Tsvangirai, then the one
receiving them would have achieved an outright majority. But conversely,
also as a purely arithmetic exercise, if the votes cast for either Mugabe or
Tsvangirai were added to mine, I would have won an outright majority. So, a
theoretical arithmetic exercise serves no useful purpose in the current
state of our nation.However, let us place on record that the
majority of people who voted for me were not going to vote for either Mugabe
or Tsvangirai, even if I hadn't joined the presidential race. Remember,
there was a surge of people who registered as voters soon after I announced
my candidacy. Therefore, both Mugabe and Tsvangirai should appreciate that I
energised the election and opened space for keener competition than would
have been between just the two of them.Regarding participation in
the power-sharing talks, allow me to re-state that our proposition soon
after the outcome of the March 29 2008 poll was announced, was that the
proposed presidential run-off be cancelled, and national leaders from all
key constituencies, not just political formations, engage each other towards
the formation of Transitional National Authority. This was not
accepted.When the tripartite negotiations commenced and the framework
and focus of the discussion were defined as "sharing power", we had no
appetite for it. We are not in the politics of power and control, but are
motivated by a commitment to participate in, and contribute to, national
affairs and serving the people.As we are all now painfully aware,
the two protagonists are fully committed to wresting maximum power for
themselves and their allies while the people die. Zimbabwe cannot afford a
bloated administration of five people in the presidency and premiership, 31
cabinet ministers and 15 deputies - this is rank madness and cruelty. No
sir, we hanker for no place at such a table.

Chimakure:
What do you think is the best way to deal with the current political
crisis?

Makoni: First, let me say that we joined other
Zimbabweans in welcoming both the Memorandum of Understanding and the Global
Political Agreement. We also join other citizens in lamenting the delay in
the formation of the so-called inclusive government. We are saddened that
the reasons for the delay have to do with power for individuals rather than
principles and priorities of national interest.Therefore, we see
no real prospect that the current impasse will be readily resolved.
Consequently, we consider that the following is a more feasible and
realistic approach:That the leaders of the two MDCs and Zanu PF
re-dedicate themselves to work for the people; to subject their personal and
respective organisational ambitions to the interests of the people and
country. I urge them to agree to a fresh approach to cooperation in a
broad-based Transitional National Authority, whose principal objectives
are:=solving the humanitarian crises of food shortages and disease
outbreaks;=restoring law and order and the security of all
citizens;=stabilisation of the economy, especially restoring normal
supply of goods and services;=reviving normal banking and other
financial services;=restoring health, education, water and sanitation
services to all citizens;=restoring the country to normal
cooperative relationships with regional neighbours and the international
community as a whole;=guiding an inclusive constitution-making process
towards a democratic national constitution; and,=preparing the
country for fresh, free and fair elections, under a new democratic
constitution.=That such a broad-based Transitional National Authority
be produced by a new inclusive forum of all national leaders, from politics,
civil society, traditional leadership, faith organisations, business and
professional sectors.

Chimakure: Some of the people in the
movement accuse you of developing a "Mugabeism". They claim that you have
allocated yourself six vehicles and thatyou are promoting
tribalism in the movement by recruiting people from Manicaland into the
movement's national management committee. What do you say to the
allegations?

Makoni: I doubt that such allegations are coming
from genuine activists of our movement. If they are authentic, why are they
not making these allegations in the fora of our movement, rather than
outside?I use only one vehicle, allocated to me openly by the relevant
authority in the movement.The allegation that I "recruited" people
from Manicaland shows the ignorance of those making it. From the time that I
announced my candidacy, people came forward from all over the country, and
from all walks of life, and volunteered to support my campaign in various
ways. When other candidates joined to contest in parliamentary and local
authority elections, more volunteers came forward to support both the other
candidates and myself. Currently, we are a movement of volunteers.
Our leadership team is national in character. At the provincial level, our
leadership teams have members from most districts in each province. So, this
tribalism allegation is a mischievous falsehood.

Pay us in Hard Currency or we Strike, Workers Warn

Thursday, 22 January
2009 20:49AS the Zimbabwe dollar continues to lose value due to
hyperinflation and the near dollarisation of the economy, labour unions are
pushing for employees to be paid in hard currency.

Paying
workers in hard currency, unions and labour analysts say, will cushion them
from spiralling prices of goods and services because foreign currency is not
susceptible to high inflation like the local dollar.

Over the past
four months services such as education, health, rentals and transport, among
other things, have been dollarised yet the majority of employees are paid in
local currency.

Last year, teachers and health workers downed
tools demanding to be paid in foreign currency and fears abound that
employees in other economic sectors could follow suit this year - further
crippling the already struggling industry and commerce
sectors.

The president of the Zimbabwe Congress of Trade Unions
(ZCTU), Lovemore Matombo, said wage negotiations this year should be in hard
currency.

He said the umbrella labour body's general
council had resolved that ZCTU "affiliates and the generality of the
workforce" should negotiate wages in terms of the US dollar, "failure of
which the sector will withdraw its labour".

The move to pay
workers in foreign currency, Matombo said, was precipitated by the near
dollarisation of the economy.

Government last September
licensed selected manufacturers, wholesalers and retailers to sell goods and
services in foreign currency, but almost everyone in the country is now
trading in hard currency.

Foreign currency is even demanded on
commuter omnibuses.

While goods and services are now being paid
for in foreign currency, the majority of workers in both the formal and
informal market are still getting their wages in local
currency.

Government, the largest employer in the country, has
since paid soldiers and teachers their January salaries in local currency
amid reports that it has insufficient hard currency to pay the
workers.

Morale is low in the army, while teachers have vowed
not to return to work when schools open on Tuesday unless they are paid in
hard currency.

The move to pay civil servants in local currency
was met with heavy criticism by the ZCTU.

"Awarding salary
increments in local currency is no longer an option given the dollarisation
of the Zimbabwean economy," the ZCTU said. "Workers from all industries will
soon join teachers, nurses and doctors in national action as the situation
has become unbearable. The ZCTU demands that all wages be paid in foreign
currency or the foreign currency shops are done away with,
forthwith."

Progressive Teacher's Union of Zimbabwe
secretary-general Raymond Majongwe said the near dollarisation of the
economy has rendered salaries in local currency
unsustainable.

He said: "We are not going to apologise for
asking for salaries in foreign currency. Civil servants, especially
teachers, have been denied meaningful salaries for a long
time."

Majongwe said the US$2 300 teachers are demanding is
justified considering how foreign currencies have been devalued in the
country.

"Zimbabwe is the only country in the world where
US$100 buys nothing," he added.

Zimbabwe Teachers
Association spokesperson Sifiso Ndlovu said workers could no longer survive
on salaries paid in local currency.

"We are asking for salaries
in foreign currency because we are operating in an economically abnormal
situation where you can no longer use the local currency to buy goods or
access essential services," Ndlovu said.

When asked why
teachers in Zimbabwe were asking for salaries much higher than what their
counterparts were getting in the region, Ndlovu said they were simply
responding to market price distortions where one requires more than US$500
to buy groceries for a family of six.

In South Africa and
Namibia teachers are paid between US$500 and US$1 300, while in Zambia they
get US$300.

The education sector has been severely affected by
a skills flight as a result of low remuneration. Pupils at all government,
mission and private schools have not been going to school since last
year.

Last week the Zimbabwe Independent revealed that the
country's sole examinations body, Zimbabwe Schools Examinations Council
(Zimsec), was yet to recruit teachers to mark the 2008 public
examinations.

President of the Hospital Doctors Association,
Kudzai Chimedza, said junior doctors would also not be going to work until
government starts paying healthcare workers in foreign
currency.

"Government had proposed that the least paid worker
be paid US$50 while the highest paid gets US$850, but the money is too
little considering that everything, including rentals, are now being paid in
foreign currency, "Chimedza said.

Chimedza said it was
appalling that government had allowed hospitals to offer their services in
foreign currency, which is way beyond what health workers
earn.

"We don't enjoy watching people suffering but the
government has to understand our situation: US$50 is not even enough to pay
rentals for a room in the high density areas."

Major
hospitals including the largest referral centre, Parirenyatwa, were last
year forced to close down after healthcare staff downed tools in protest at
poor salaries and working conditions.

The workers demanded
salaries in foreign currency in tandem with their counterparts in the
region.The strike coincided with a cholera outbreak which has claimed
more than 1 600 lives.

However, normality is expected to
return to hospitals after the United Nations Children's Fund last week
intervened and unveiled a US$5 million fund to pay health
workers.

Journalists have also said they should be paid in hard
currency with effect from January or they would go on
strike.

In a statement to media houses this week, Zimbabwe
Union of Journalists president Mathew Takaona said: "The ZCTU general
council at its special meeting of January 17, 2009 made a resolution that
all salaries and wages be paid in foreign currency. For the compelling
reasons cited by the general council, it is instructive that all works
councils comply and all workers be now paid in foreign
currency."

The demand for salaries and wages to be paid in hard
currency was prompted by the refusal by manufacturers, wholesalers and
retailers to accept the local currency as payment.

Even
landlords in towns and residential suburbs are demanding rentals in foreign
currency.

A room in the high-density areas is being charged at
US$30 while urban transport operators are charging R5 for a single trip into
town.

A snap survey by the Independent in the central business
district of Harare revealed that most supermarkets were no longer accepting
local currency.

A 20kg bag of mealie meal is being sold at
US$15, beef US$5 per kg, a bar of soap US$1,50, a loaf of bread US$1 and a
2kg packet of rice US$3.

Schools have set their fees from
US$100 to US$2 500 a term although government is yet to approve payment in
hard currency.

Patients Dump Urban Healthcare for Rural, Mission Hospitals

Thursday,
22 January 2009 20:45WHEN Tobias Nzira recently tested HIV-positive
after visiting a New Start Centre he never thought he would encounter
difficulties in seeking treatment for opportunistic infections in the
capital.

After receiving counselling at the centre, he had vowed to
live positively and pursue his dreams.

Nzira was told at the
centre to undergo a CD4 count to determine whether or not he should be put
on the life-prolonging antiretroviral (ARV) drugs.

With
most opportunistic infections clinics having shut down last year after
health workers embarked on an indefinite strike, Nzira's only hope was
Howard Mission Hospital in Chiweshe, Mashonaland Central.

The clinics at Parirenyatwa, Harare and Chitungwiza hospitals provided
services to people living with HIV and Aids.

Colleagues
told Nzira that if he visited the hospital he would be immediately put on
the ARVs programme at affordable cost if his CD4 count is below
normal.

Nzira is not the only one who has joined the great trek
to rural mission-funded hospitals, but hundreds of urbanites across the
country have also joined them as health delivery at public hospitals is
almost non-existent, while fees at private institutions are beyond the reach
of many.

With medical aid no longer accepted by private
hospitals, patients like Nzira now rely on rural mission hospitals that are
donor-funded like Howard, All Souls in Mutoko, Mutambara in Manicaland,
Father O'Hea in Zvimba, Karanda in Mashonaland Central and Silveira in
Masvingo.

Public and private hospital fees are now paid in
foreign currency and most people living with HIV and Aids cannot afford to
pay.

According to UNAids, Zimbabwe has a severe generalised
epidemic of HIV and Aids with an overall adult (15-49 years) HIV prevalence
rate of 15,3%.

An estimated 1,3 million adults and children
were living with the HIV infection in 2008 and of those 680 000 were women
of childbearing age.

The organisation said access to HIV and
Aids care and treatment is threatened by the political and economic
situation, which has caused a number of difficulties in HIV
programmes.

A spokesperson for an HIV and Aids organisation
said most of these mission hospitals are funded by the Global Fund and are
better equipped than urban institutions.

"For example, Mt
Darwin Hospital has three doctors, two lab technicians, two nurses and two
pharmacists who are paid by the global fund," the spokesperson
said.

"The doctors are paid well and you would find that many
of these hospitals are well stocked in terms of medicine. That is why many
people are flocking there."

That is the reason why Nzira
preferred Howard Mission Hospital. His medical aid, like those of many
Zimbabweans, had become invalid and further constrained the health delivery
system.

Recently, medical aid companies have attempted without
success to persuade their clients to subscribe in foreign
currency.

Doctors' consultation fees now range between US$30
and US$50 and almost all of them have since stopped accepting medical aid
and are demanding up-front payment in foreign currency.

This move has effectively blocked access to health care for most
Zimbabweans.

Doctors and medical aid societies have been
squabbling over fees for years, while subscribers accused both of
unilaterally imposing self-determined fees and subscription structures on
them.

The doctors have lost trust in health insurance companies
as some of them have over the years failed to pay them on
time.

Paul Chimedza, former president of the Zimbabwe Medical
Aid Association (Zima), said in this day of hyperinflation it was irrelevant
to have medical aid.

"Zimbabwe is surviving under abnormal
conditions and people are not talking about medical aid anymore," Chimedza
said. "Most doctors and service providers are now dealing with the patients
directly. Doctors want money up-front just like a supermarket where you have
to buy the product first before making use of it."

He said
medical aid societies were still on the road to creating foreign denominated
models for subscribers, and were still to gain acceptance in the health
sector.

Chimedza added: "Doctors are still hesitant to take
medical aid. Even when things were normal doctors had always had serious
problems with medical aid societies. They would fail to pay a third of the
medical bills.

"If one has US$100 it would be prudent to just
save the money somewhere and make use of it if one wants to go to the
doctor. The problem is that people might subscribe and when they visit their
doctors they would be told that we do not accept medical aid and in the end
they lose both ways."

He said the other option was for
companies to form partnerships with doctors and pay them monthly
subscriptions for their workers' healthcare.

"This is a much
more guaranteed procedure to get a service," he said.

A staffer
at Premier Service Medical Aid Society who preferred anonymity said their
organisation was still negotiating with doctors over charging in foreign
currency.

"There hasn't been a proper plan put in place to
strategise the payment in foreign currency with the doctors. For Excel Plan,
the subscription at the moment for 20 units per one person per month is set
at US$2 while for the Pinnacle plan, which is the highest scheme, a person
has to pay US$4 monthly," he said.

He, however, said these
payments were not viable.

"What might be encouraged is for
people to keep their accounts and in the long run when things are okay
things might work out. Otherwise it is disaster," he added.

A snap survey conducted by the Zimbabwe Independent this week found that
most hospitals and private clinics no longer accept payments through medical
aid.

Avenues Hospital said they would not accept medical aid if
it were paid in local currency. "We no longer accept medical aid, especially
if paid in Zimbabwe dollars. It has to be in foreign currency. Payment (in
foreign currency) depends on

how much you pay monthly at
the aid society," said a lady at the reception.

A dental
surgeon in Eastlea said he no longer accepted medical aid and was accepting
payments in US dollars only.

Collapsing Gold Producers Seek Retention Scheme

Thursday, 22 January
2009 20:20GOLD producers owed over US$30 million by the Reserve Bank
have proposed to government that it grant a full retention package for
bullion export earnings.

Documents in possession of the
businessdigest disclosed that gold miners last Friday submitted several
proposals to interim Mines minister, Sydney Sekeramayi, seeking his
intervention to save the erstwhile leading foreign exchange earner from
collapse.

Virtually all gold mines across the country have
suspended operations owing to cash flow problems.

The
miners' proposals follow a series of attempts by the cash-strapped industry
to engage authorities over the arrears by the central bank.

"It
is proposed that gold producers be allowed to retain 100% of their export
earnings to ensure a quick recovery of production to peak levels," read the
proposals.

Under the current payment arrangement, the central
bank through its subsidiary Fidelity Printers and Refiners (FPR) pays 75% of
the deliveries in hard currency with the remainder being paid in the local
unit at the interbank rate.

"The gold sector has consumed
capital over the years. There is need for the sector to reinvest in
restoration of the production base that has been eroded," the proposal read.
"If 100% retention is not given, the gold industry will take longer to
recover, as resources will be split between restoration work and growth
issues.

It can be argued that with 75% retention the road to
recovery will take twice as long as with 100% retention."

Payment delays for gold delivered to Fidelity Printers and Refiners have,
according to the Chamber of Mines of Zimbabwe (CMZ), led to an estimated
annual production of 3,4 tonnes compared to 27 tonnes at peak in
1999.

This historic downward trend resulted in last year's
suspension of FPR from the London Bullion Market Association
(LBMA).

The miners argued that gold production from the
country's top producers - Metallon, RioZim, Forbes & Thompson, Falcon,
Caledonia, ZMDC, Bilboes, Freda Rebecca and John Mack, together with
small-scale producers, could meet accreditation requirements to the LBMA
next year if government provisionally allows the Chamber of Mines to market
the precious mineral to South Africa's Rand Refinery.

The
prestigious LBMA requires producers to extract a minimum of 10 tonnes
annually.

Unlike the current payment arrangements, the miners
also proposed the Rand Refinery to channel payment of proceeds of the sales
of gold into the offshore bank account of the Chamber of Mines, which will
in turn provide a payment schedule to the bank for payment to individual
gold producers.

"The agreement is to be backed by RBZ
guarantees that are acceptable to potential lenders to the gold sector. The
RBZ and the Chamber of Mines will set up a committee to monitor progress in
the implementation of the new arrangements and to recommend further changes
which will enhance gold production," read the proposal.

The
proposed arrangement, the miners argued, would also allow them to re-start
capital work and exploration that has been stopped due to viability
problems.

The lodgment of gold, the miners proposed, would
continue to be through FPR who would act as an approved laboratory for assay
and consolidation of bullion for export.

This means that
the Chamber of Mines would contract FPR to assay and consolidate or refine
before export to the Rand Refinery.

Sources said the
"commendable professionalism" shown by Sekeramayi since assuming the mines
portfolio ignited hope among the gold producers although he did not
immediately resolve the matter.

Efforts to get comment from
Sekeramayi were in vain as his mobile phone was not
reachable.

Last year the beleaguered gold producers demanded
that the Ministry of Finance should revoke the Reserve Bank bullion-trading
licence and re-issue the permit to the CMZ after blaming the central bank
for paralysing the industry.

CFX Bank Under Police Probe

Thursday, 22 January 2009 20:15
CFX Bank and senior managers are under police probe for allegedly diverting
$900 billion (then US$450 000) in new notes from the central bank last
December, meant for depositors, and buying assets and foreign currency on
the black market.

Documents in possession of businessdigest show
that of the $900 billion which the bank received from the Reserve Bank on
December 3 at 9.30pm, $255 billion was allegedly used to buy assets while
the remainder was diverted to the parallel market to buy foreign currency
when it was recovered by the Reserve Bank.

The rate of the
local currency to the US dollar was US$1: $2 million then, before it rose to
$5 million the following day.

According to the documents, Sydney
Makonese, a chief dealer with the bank was on December 5 given US$19 870 and
24 800 South African rand worth $39,7 billion and $4,9 billion respectively
using the then exchange rate by the director of treasury.

"Thabeth Muzarakura, an administration manager, was handed over diesel and
fuel coupons by the head of finance on Monday December 8 2008.

In
the afternoon she received additional coupons from Sarah Makombe (an
accountant at the bank), who advised that an unidentified man had delivered
them to her," the documents said.

The breakdown of the coupons on
hand was 10 000 litres of petrol valued at $18 billion and 4 720 litres off
diesel valued at $8,4 billion.

"On Sunday December 7 2008 around
1630 hours Mrs B Kadira - retail director - requested keys to ATM room at
London Derry from CCD Officers. Grocery items were delivered by a man called
Brain in three trips using two different vehicles with the following number
plates - ABD 2906 and DND 611 NW (South African)," reads one of the
documents.

According
to the document, the purchase of the assets was unprocedural because
requisition and authority to incur the expenditure was not done by the
relevant department.

"A requisition for Redan fuel was done but BP
coupons have been delivered and they are not in batches. Kadira (retail
director)'s involvement in the purchase of human resources related items is
questionable as the department was still in the process of consulting MANCO
(management committee) on staff benefits," the document said.

The documents said there was no audit in the purchase of the items - that
is requisitions or invoices. On December 3 last year banking
institutions were issued with a total of $80 trillion to prepare their
system for the increased cash withdrawal limits, which went into effect the
following day.

CFX Bank and senior managers are under police probe
for allegedly diverting $900 billion (then US$450 000) in new notes from the
central bank last December, meant for depositors, and buying assets and
foreign currency on the black market.

Documents in possession
of businessdigest show that of the $900 billion which the bank received from
the Reserve Bank on December 3 at 9.30pm, $255 billion was allegedly used to
buy assets while the remainder was diverted to the parallel market to buy
foreign currency when it was recovered by the Reserve Bank.

The
rate of the local currency to the US dollar was US$1: $2 million then,
before it rose to $5 million the following day.

According to the
documents, Sydney Makonese, a chief dealer with the bank was on December 5
given US$19 870 and 24 800 South African rand worth $39,7 billion and $4,9
billion respectively using the then exchange rate by the director of
treasury.

"Thabeth Muzarakura, an administration manager, was
handed over diesel and fuel coupons by the head of finance on Monday
December 8 2008. In the afternoon she received additional coupons from Sarah
Makombe (an accountant at the bank), who advised that an unidentified man
had delivered them to her," the documents said.

The breakdown
of the coupons on hand was 10 000 litres of petrol valued at $18 billion and
4 720 litres off diesel valued at $8,4 billion.

According to the document, the purchase of the assets was
unprocedural because requisition and authority to incur the expenditure was
not done by the relevant department.

"A requisition for Redan
fuel was done but BP coupons have been delivered and they are not in
batches. Kadira (retail director)'s involvement in the purchase of human
resources related items is questionable as the department was still in the
process of consulting MANCO (management committee) on staff benefits," the
document said.

The documents said there was no audit in the
purchase of the items - that is requisitions or invoices.

On
December 3 last year banking institutions were issued with a total of $80
trillion to prepare their system for the increased cash withdrawal limits,
which went into effect the following day.

CFX got a total of $900
billion on the same day for issuance to their depositors.

Reserve Bank governor Gideon Gono said: "At exactly 9.30 pm on December 3
2008, the Reserve Bank's tracking system picked up that the serialised notes
issued to CFX had mysteriously found their way into the
market."

CFX got notes in the following series: $10 million
notes with serials AA0207001 to AA0217000 amounting to $100 billion; $50
million notes with serials AA7363001 to AA7377000 amounting to $700 billion
and $100 million notes serials AA0079001 to AA008000 amounting to $100
billion.

The $900 billion signed off by CFX on collection was done
under voucher number 01408 at 1220 hours on Wednesday.

At 9.30
pm on Wednesday serialised new notes off CFX's withdrawal from the Reserve
Bank were already on the market.

A protected informant who worked
with the Reserve Bank throughout the night reported that a total of $260
billion was offloaded by CFX at night on Wednesday, buying foreign
currency.

Gono also declared the bank's management "unfit and improper" to work in any
banking institution in Zimbabwe or sit on any banking institution's board
for the next five years.

The top management were identified as O
Mukumba -- Managing Director; PT Ndoro -- Company Secretary; B Kadira --
Head of Retail; W Chidziwa -- Head of Treasury and International Banking; P
Mureya -- Head of Finance and Administration, C Dangarembga --- Head, Risk
Management and C Saungweme -- Head of Audit.

Formerly Century
Bank, the institution was renamed CFX Bank (CFXB) following a merger between
CFX Financial Services (CFX) and Century Holdings Ltd in 2004. The bank was
placed under the management of a curator on December 17 2004.

CFX applied to merge the operations of CFXB with CFXMB on the grounds that
it was not viable to continue the business of the merchant bank separately
as all trading was taking place in the name of CFX Bank Ltd.

The
merger was approved by the Minister of Finance in 2006. Following the
determination that CFX Bank Ltd had been resuscitated, curatorship of the
bank was uplifted on February 28 2006.

The (Im)possibility of an Island

Thursday, 22 January 2009
20:11ONE could almost be forgiven for forgetting the days when a daily
allowance of a dollar to take to school could afford a "freeze-it", a packet
of maputi and perhaps an after-school chocolate ice cream cone from the
Dairiboard vendors, strategically positioned just outside the school gate to
capture whatever loose change was left from the break time
'bingeing'.

Back then, a $10 gift from a relative after eagerly
showing them your latest report card was soon followed by dearest mommy
seizing it for safekeeping, and only given back to you through some form of
an instalment scheme. Back then that dollar counted for a lot and it was not
even American!

Fast forward to today and the latest craze is on
dollarisation, dollarisation and still more dollarisation.

Zimbabweans find themselves paying for everything from hospital fees,
education and groceries in some form of foreign currency. Even some areas
that people thought were safe such as cellphone airtime and watching soccer
matches have not been spared.

However, perhaps owing to the
gross market inefficiencies in our economy the pricing of some of these
goods and services do not make much sense. Everything is just plainly
overpriced to say the least.

There is a general feeling however
that prices are beginning to come down quite significantly in recent weeks.
A major reason for this perhaps is that using US dollar pricing means that
local players will now have to face direct competition from companies beyond
our borders.

In the long run local suppliers can only charge at a
level where it would not be worthwhile for consumers to drive to border
towns in South Africa, Botswana or Zambia for most of their
shopping.

One can think of the example of alcoholic beverages. This
particular market was perhaps the first to experience market forces driving
down prices.

The market for beverages should be about
maximising profits through volume rather than excessive mark-ups. When
foreign beers first appeared, they were priced at five to 10 times what they
are currently selling for. Now local beers are at times even more expensive
than some of the imports.

This should serve as a sign for future
trends across most products and for the rest of the economy. Local
manufacturers need to start realizing they can easily lose the competitive
advantage arisingfrom being closer to their market and a sense of
supporting local companies just because they are Zimbabwean.

An
encounter with a cellphone subscriber presented another such anomaly. The
lengths to which consumers are willing to go to ensure they are not
short-changed can be amazing.

On a trip down south, this particular
subscriber was interested to know if it was cheaper to use a South African
issued prepaid cellphone line.

On checking the various operators'
websites it turns out that that can actually be cheaper in some instances
where international SMSs from a South African based operator can be as low
as R2.50 while roaming in Zimbabwe!

So looking at set up costs
alone foreign operators seem to have an advantage. Using Vodacom (SA) as an
example, it costs you less than a South African rand to buy the line and
there are no activation costs for the SMS-only roaming option.

Compare this with a local offering at US$20 for the line and SMS charges
ranging from US$0.14 to just under US$0.40 for local and international
messages respectively.

Assuming one wants the SMS-only option; only
after sending about 200 messages would local operators actually start
becoming cheaper. But by then trying to regain lost customers could be a lot
more difficult.

Unconfirmed reports suggest a British based
operator can offer calls (again while roaming in Zimbabwe) at less than the
cost of making local-to-local calls and it is probably on per second billing
at that! With the age of borderless technology, internet banking will enable
consumers to easily service the alternatives without much of a
hassle.

While this particular example highlights the skewed pricing
of Zimbabwean mobile operators, the same would apply to any other sector.
And the super-profits will only last as long as the market is not informed
and aware of the various alternatives available to them.

The
world we live is fast changing and the days of operating as some form of
island with protected local industries could soon be over.

Zimbabwe
is in the process of making some commitments with regional blocs to create
free trade areas with the eventual hope of creating a fully-fledged customs
and monetary union. Should the status quo remain local companies will surely
be no match for external players.

Local companies should either
look at more cost effective business models or just stop being greedy. To
prove this you could try offering a local consumer an imported Hansa beer at
the price of a local pilsner and guess what they will choose.

To be fair such pricing mismatches perhaps result from the haphazard manner
in which the "dollarisation" is occurring. Perhaps now would be the time to
set up proper official and blanket treatment for all suppliers.

Offering foreign currency licences to part of the economy creates unfair
advantages for some while continuously stifling healthy competition between
players to bring prices down.

Dollarising the stock market, for
example should soon be followed by that of the whole economy. In the long
run, perhaps the consumer will benefit (as wages and all else is converted
into foreign currency) but then again, this is pretty unlikely to happen as
we all know who the biggest loser will be!

Chinamasa Faces Daunting Task in Presenting Budget

Thursday, 22 January
2009 20:06LAST year former Finance minister Samuel Mumbengegwi made a
record devaluation of the Zimbabwean dollar when he presented his
budget.

He devalued the dollar by 11 900% to 30 000 from 250 which
had prevailed since July 31 2006 in a bid to attract foreign currency on the
official market.He concluded his budget by admitting that it would
not set the pulses of suffering Zimbabweans racing.

He was
left with little to do but waffle about stability - while avoiding to
mention where the money was going to come from - and explaining the effect
spending would have on the economy.

It made depressing listening
Herbert Murerwa concluded his last four budgets by seeking divine
intervention.

In 2006, he concluded his budget speech by quoting
the Biblical prophet Jeremiah.

Chapter 29 verse 11 of his book
states: "For I know the thoughts that I think toward you, thoughts of peace
not of evil but to give a future and a hope."

During his last
budget in 2007, Murerwa closed his speech with another quote from 2
Corinthians Chapter 4 verses 16 and 17. But whatever he might have wanted to
infer basing on the good word, he lost it.

Simba Makoni's budget
statements were presented amid expectation that they would breathe life into
the failing economy by introducing measures that would help resuscitate the
ailing manufacturing and mining sectors.

Instead, he always
concluded by pinning hopes of recovery on the collapsed agricultural
sector.

Bernard Chidzero and Ariston Chambati and once acting
Finance minister Emerson Mnangagwa presented their budgets when the economy
was still sound and as such did not have a lot of headache during their
presentations.

Acting Finance Minister Patrick Chinamasa unlike his
predecessors will have a daunting task of presenting a budget when the
economy has virtually collapsed.

Economist Brains Muchemwa said
presenting a budget in local currency would not make sense since the
currency was losing value at an alarming rate.

"The only way
the budget will make sense was if it is announced with figures being
translated to foreign currency. This is the time to learn about the
country's health. Where the money will come from will paint a clear picture
about the future. Will it be taxes and tariffs, domestic or external
borrowing or will they print money?" said Muchemwa.

Economic
analyst John Robertson said Chinamasa's task was not an easy one as demands
for supplementary budgets by ministries reflected the seriousness of
Zimbabwe's economic rot and raised serious questions over the government's
official inflation data.

"The demands were frightening when you
compare to the original budget. This shows the magnitude of deep-seated
inflation and is testimony that the government has failed to bring inflation
under control," Robertson said.

Robertson said government spending
was too high and that there was inadequate cash being channelled towards
infrastructure development.

Next Thursday Chinamasa will present
the 2009 national budget to parliament following a two-month delay caused by
a deadlock over the formation of a coalition government.

The
budget is traditionally presented in November but this had been put on hold
in anticipation of the formation of a unity government involving Zanu PF and
the two formations of the opposition Movement for Democratic Change
(MDC).

Prospects of the unity government have dimmed after Monday's
deadlocked meeting between President Robert Mugabe and the leader of the
main MDC formation, Morgan Tsvangirai. Chinamasa looks to break with
tradition and come up with a short-term budget, possibly covering three or
six months.

Government officials this week hinted that the
budget could be denominated in foreign currency in line with developments in
all economic sectors where the more stable US dollar and South African rand
are the preferred medium for business transactions.

ZSE Considering Switch to US Dollars

Thursday, 22 January 2009
20:03THE Zimbabwe Stock Exchange (ZSE) is considering proposals
submitted by listed companies to report their accounts in United States
dollar terms.

The local bourse this week said it had received a
number of proposals from quoted companies to report their financial result
in US dollars. The companies also cited failure by Central Statistical
Office (CSO) to publish inflation results for the greater part of last
year.

ZSE chief executive Emmanuel Munyukwi said the proposals were
submitted and the local bourse would look at the merits of the
proposals.

Zimbabwe's economy is now virtually dollarised whilst
the CSO has failed to publish year-on-year inflation figures on time for the
past 13 months.

Companies had argued in their proposals that
the delay in the release of inflation figures was affecting the release of
their inflation-adjusted accounts.

They also argued that most
of their costs were United States dollar-denominated.

"There is
a drive at the moment by some of these (listed) companies to publish their
(financial) statements with figures denominated in US dollars," Munyukwi
said.

"We are not too sure if that is legal but we are looking into
it," he said.

Mining counter, Falgold, last year published its
financial statements in US dollars.

However, this move was met
with stiff resistance from the Stock Exchange forcing Falgold to eventually
publish its statements using the local currency.

Listed
companies are required by both the ZSE and the Companies Act to publish
their audited financial statements at least 90 days after the financial year
end. The 90-day requirement is also observed internationally.

The
delay in the release of the inflation figures has made it difficult for most
listed companies to release their accounts within the required 90-day
period.

The rate at which the dollar was losing value was also
making financial results to fail to make sense.The stock market
said there were fears that some local companies could fail to submit their
audited statements on time because of the delays in the inflation
figures.

ICAZ last year said annual reporting by both quoted and
unquoted companies had become a nightmare because of the delay of inflation
figures.

Foreign owned companies were said to be the worst affected
as they have stricter reporting requirements as holding companies will have
to consolidate and report within 90 days.

Confederation of
Zimbabwe Industries (CZI) president Callisto Jokonya said: "Inflation
figures are always of importance as they help us plan. We are talking to the
Minister of Finance who is the first port of call.

If we quote in
other currencies, it would look like we are not working with government. But
government has to make the environment favourable by providing these
figures."

Barman Calls Last Round

Thursday, 22 January 2009 19:57THIS
year is a difficult year for everyone around the world and of course much
more difficult for Zimbabweans.

The shocking confessions from
Bernard Madoff and Ramalinga Raju that preceded 2009 were ominous signs of
the great belt tightening to come, and here we are, tightening belts that in
fact need loosening as further tightening will snap the same belt that needs
to keep the trousers in position.We have entered a phase where for
many developed economies, monetary policy is less likely to be effective
going forward as interest rates near zero, and the craze of fiscal policy is
visibly taking over.

This is a pleasant year for central bank
governors to take an early holiday at the beginning of the year, one that is
likely to be much longer than they desire especially for the US Fed's Ben
Bernanke who has not been long in the office.

But since this is
one man who believes so much in fiscal stimulus in fighting a deflation,
hopefully he will find more consultancy work from the treasury than from the
Fed.

And of course our own central bank governor can equally join
the central banker governors around the world.

With a
Zimbabwean economy that has picked an unstoppable dollarisation wave, how do
we leverage on monetary policy when that same monetary policy is now hardly
effective in the US where the dollar originates?

No one should
query if the RBZ governor decides to go on an open-ended leave between now
and 2010.

Mervyn King, the governor of the Bank of England, should
be more remorseful, having sent interest rates to their lowest since 1694,
more than four centuries ago. And for the first time he should be feeling
less powerful and idle. At least the Japanese have been there before and
appreciate how the central bank governor can go AWOL for over one-and-a-half
years with interest rates at zero.

The monetary policy levers
are just no longer useful, and despite the massive cuts in interest rates
around the big economies, credit can't just flow into the deficit areas and
the major global buzzword now is 'bailout'.

The world has come to
self-correction. After taking cheap beer the whole night, the global economy
could not afford to avoid the toilet for too long. And today many countries
still queue to relieve the excesses in their system.

The binge,
emanating from cheap credit that drove household debt to disposable income
to dizzying heights of as much as 158% in December 2006 for Australia, has
eroded the business confidence and no barman wants to sell beer to anyone
now, at least on credit.

And that is the big challenge facing the
addicts, the bankrupt consumer and cashless corporate notwithstanding huge
injections being pumped into the financial system around the
world.

From the negativity flowing around the world on lay-offs and
more bailouts needed, the barmen are less likely to be selling beer to
anyone, even though the manufacturers have delivered it free to their
warehouses.

Zimbabwe had its own cheap beer for years, and when
the morning of relieving the system came, it came with pain. At a time the
global economy ran on cheap credit, Zimbabwe ran on its own free flow of not
only cheap credit, but also free handouts.

There is a big
factor of consumer and social protectionism that the government ran with for
a long time through price controls that has come to haunt the very same
people that were meant to benefit from it.

Who does not remember
the cheap fuel of 2003-2004? I remember one Friday afternoon driving to
Botswana, some 700km away just because I had nothing interesting to do in
Harare!

Who cannot remember speaking on the phone for three-five
hours on a daily basis (peak period) until just before January 2009 only
because they had nothing to do and could afford a US$ to pay the bill at the
end of the month? Does anyone care to switch off lights or geysers as they
retire to bed?

The cheapest rates for electricity and water are
arguably found in Zimbabwe, so is vehicle licensing and road
usage.

Government policy, at a time the budget deficit has been
soaring to over 100% of GDP (after including quasi-fiscal activities of the
RBZ), made disastrous policies in consumer protectionism without sufficient
funding, the consequence of what we see today in failed physical capital
preservation.

The correction is coming slowly through
dollarisation, although there is massive resistance now because the same
people the government sought to protect are now so vulnerable that they
cannot be left alone to meet the market price for goods and
services.

And an intervention is desperately needed in the form
of a stimulus fiscal package, a package that unfortunately is beyond the
reach of the government alone without engaging the international community
and donors.

The previous Z$-related stimulus packages have failed
because of the obvious reasons that the economy is highly incapacitated on
the part of physical capital and foreign currency, which basically is the
lynchpin in addressing the critical supply side of the economy.

Is it not sad that Zimbabwe is now a province of South Africa? Many
producers of goods in South Africa count Zimbabwe as their domestic market,
and the productive sector in Zimbabwe that used to provide the jobs and
contribute to government revenue has given in to years of price controls and
administrative distortions.

The many jobless and socially
vulnerable Zimbabweans in the rural areas are now defenceless in the face of
the noble concept of basic sustainable market discipline of paying the right
prices for goods and services via dollarisation.

They now need
more temporary cushion than they ever did, and unfortunately it's no longer
tenable. The state cannot print US dollars for subsidies as the Z$'s
rejection hastens.

The options are very limited, but still they
exist. The political stalemate has created a lot of apprehension among
potential guarantors to the recovery process.

But the economy
cannot stop because of the politics, and the government has the right to
unlock the gridlocks, only of course if it gets the courage to shrug off the
heavy tag of policy inconsistency and unpredictability that has shredded its
credibility.

It's clear the dollarising economy is creating huge
suffering to the majority because over 98% of the workforce earns in the
local currency that is not meaningfully acceptable even in the rural areas
where everything one intends to buy starts at US$1.

With 80% of
people estimated to be living in the rural areas and their traditional
breadwinners in towns where there are now unemployed, the situation is even
more dire. But a government should not give up on its
people.

The Americans are a proud people that are creating
huge stimulus packages to fend off a recession. You want to meet a proud
nation, meet the Americans!

We have had a recession since 1999,
and have tried everything and failed to kick start economy, from the
misleading price controls to the productive sector bailouts. What we have
not done, that which will raise the economy, is giving the right market
impetus on pricing and access to international lines of credit.

The former is inevitable with dollarisation. The global market has dried
out, and money cannot flow anymore. The barmen are not as friendly.

If we are not careful, the pricing reform through dollarisation is
benefiting more South African producers who have already been benefiting
from a wider uncontested market in Zimbabwe, and of course as well from the
depressed wage rate emanating from the large pool of Zimbabwean migrants
that stream to South Africa every day.

That's probably the
reason why the South African central bank is not worried much about easing
monetary policy - because there is a huge market that is unresponsive to
monetary policy in Zimbabwe, Zambia and Botswana.

Considering
Zimbabwe has joined Botswana and Zambia as a "domestic market" for South
Africa produced goods, Tito Mboweni can still afford to give strong support
to the shaky rand through the interest rate lever without worrying much
about stimulating consumer demand which is taken as given.

The
government has one last shot to kick-start the recovery. And that is the
disposal of assets to generate foreign currency and inject spending power
into the civil servants, who in turn, because of their numbers, will turn
the creaky wheels of the economic recovery process. Mobile service
providers are now charging in foreign currency and Net*One can easily go
under the hammer. There is nothing strategic about it.

It's
unlike Zesa, PTC or Air Zimbabwe. This is the best time to sell the
government stake in Hwange when the demand for power and coking coal is
highest due to the regional electricity shortages.

We have
precious minerals under the state's claim in coal, uranium and diamonds.
There is no strategic value in these when they lie in the ground and prices
continue to plummet and a generation suffers under the worst ever inflation
in the world since 2000. After all, we are all Zimbabwean.

Eric Bloch: Govt Must Talk Less, Act More

Thursday, 22 January 2009
17:40IT is incontrovertible that the Zimbabwean economy has been
gravely shattered, and reduced to such appallingly low levels that millions
are starving, cholera exists more widely than do basic food
supplies.

Much of the infrastructure (including electricity
generation, water supply, telecommunications, health care services and
education) verges on the edge of total collapse, and hyperinflation is
higher than in any country throughout history.

Swiftly, and in
deliberate and blatant disregard for realities, government has sought to
distance itself from any responsibility for the economic
collapse.

It has consistently ascribed the decimation of the
economy, and the consequential intense hardships and suffering sustained by
the populace, to causes wholly unrelated to government.

To a
limited extent it sought, in some of the past 11 years, to attribute the
economic ills upon climatic conditions, albeit that on most occasions such
contentions were almost devoid of credibility.

However, the
most predominant of government's allegations as to the causes of the
impoverished economy, endlessly repeated, is that the Zimbabwean economy has
been brought to its knees by "illegal international sanctions".

Although almost wholly devoid of substance until 2008, government has been
vigorously adamant that the alleged sanctions were the cause, almost in
entirety, of the economic destruction suffered by Zimbabwe.

As
nauseatingly frequent as government has striven to convince all that this
was the cause of the morass that constitutes Zimbabwe's "economy", so this
column has sought to refute those contentions.

At the risk of
even greater nauseating repetition, it must be stated once again that
government's claims were almost without foundation until recently, and even
now are only partially sound.

Save and except for the provisions of
the Zimbabwe Democracy and Recovery Act in the US, which prescribes that
that country shall veto any funding support for Zimbabwe by the Bretton
Woods' institutions (the World Bank and the International Monetary Fund),
and that the US has not extended to Zimbabwe participation in the benefits
of the Africa Growth and Opportunities Act (Agoa), absolutely no economic
sanctions applied against Zimbabwe until February 2008, and yet the
Zimbabwean economy was in continuous decline since 1998!

Government counters the arguments that economic sanctions did not exist by
continuously focusing upon the diminishing provision of aid and of loan
funds and lines of credit by donor nations, international financial
institutions and private sector enterprises.

But the hard fact
is that none will lend to poor credit risks, and Zimbabwe had indisputably
become such a risk. It had recurrently defaulted in timeous debt
settlement, had an increasing balance of payments deficit, and an
ever-contracting economy.

No bankers, lenders or other suppliers
make advances if there is little reasonable expectation of settlement being
forthcoming. That is not sanctions, but good and sound business
practice.

Moreover, an unwillingness to provide loans, lines of
credit or aid can in no manner be credibly contended to be "illegal",
although Zimbabwe's government never makes reference to sanctions without
that adjoining adjective.

It is for each country to decide whom
it is willing to assist and support, and for each bank, financier and
business to decide whom it will trade with.

Decisions not to
assist, support or trade do not have to be made by the Untied Nations, or by
any other body, and the absence of any such decision neither constitutes the
refusals of aid or trade to be sanctions, or that those decisions are
illegal.

But government persists in its contentions of illegal
sanctions, thereby misleading the populace and intensifying its alienation
of the international community in general, and of possible providers of
assistance, potential investors and others, thereby further worsening the
state of the economy.

However, even if sanctions had
previously existed, and recognising that some countries have now resorted to
economic sanctions against Zimbabwe (primarily being the US and the
countries comprising the European Union), government should desist from its
constant endeavours to exonerate itself, and instead should seek to minimise
the consequences of those sanctions.

This it can do in several
ways. First and foremost would be to seek the termination of those
sanctions. Without in any manner surrendering Zimbabwean sovereignty,
government should interact constructively with the countries applying
sanctions, pursuing reconciliation without subjugation.

In
particular, government must intensively restore democracy, respect for human
and property rights and maintenance of law and order, with just and humane
operations of the police and armed forces.

Not only is it in
any event incumbent upon government to do so in fulfilment of its
constitutional obligations, but it would significantly restore Zimbabwe's
international relationships.

However, pending the withdrawal of
sanctions, government must facilitate the survival of the
economy.

As greatly as most people will justly condemn much that
the Rhodesian Front government of the UDI period espoused, nevertheless the
economy very substantially circumvented many of the hindrances and
constraints of the UN-imposed, very comprehensive international sanctions
that prevailed throughout 1966-1979.

So too did Israel for
years under the yoke of sanctions of Arab states and others supporting them,
Iraq under Saddam Hussein, Libya for many years, and others. But what has
the Zimbabwean government done to assist the economy's survival under
sanctions? - Absolutely nothing!

In addition, government could
energetically pursue the strengthening of economic linkages with those
countries that are not applying sanctions against Zimbabwe, and who could be
interested in intensified economic ties with Zimbabwe.

To date
government's efforts in this regard have been limited to its "Look East
Policy", with comparatively limited positive results.

It is time -
nay, it is long overdue - for the Zimbabwean government to recognise that it
must resort to less talk (especially the fruitless, false, perpetually
vituperative castigation of other countries, and the repudiation of
self-blame), and instead must resort to meaningful action.

Candid Comment: MDC will not Fall Into Zanu PF Trap

Thursday, 22
January 2009 20:27WHEN a struggle becomes long and the end becomes a
mirage, opportunism, hypocrisy and dishonesty creep in. In all these
situations, principles are sacrificed on the altar of
self-interest.

The struggle, already arrested by exhaustion,
becomes bastardised.

History shows that those struggles that
have survived have only done so because a few have stayed the course and
have refused to be seduced by myopic soft landings.

It is
this sort of mentality that has given rise to a new school of thought that
seeks to revise our recent history and has peddled myths about the limited
options available to the people of Zimbabwe, and have therefore sought to
compromise the one thing that can never be compromised.

This is the
sacrosanct principle that it is only the people that have an inalienable
right to decide their course and their destiny.

The revisionist
school of thought and its disciples constitute a bunch of tireless, airport-
lounge activists and a beehive of "people's representatives" who are nothing
but a cocoon of elitist mafia.

Frequently, their ideology is
betrayed by pseudo-intellectual, high-sounding but superfluous blur. It is a
pure distillation of anger and frustration masquerading as political
strategy.

Let us begin with the contention that there was no winner
in the March 29 election.

Indeed there was a winner! We
contested this election without resources, without access to the media,
without access to vital electoral information and data.

Contrary to the provisions of the Electoral Act, we were not availed the
voters' roll; neither did we know the number of polling stations.

The law kept being changed in the course of the game and it was more like
playing tennis with a continuously moving base line.

Furthermore, as we exposed at the time, all state agents manning the polls
were carefully handpicked to exclude anyone thought to be sympathetic to
us.

Indeed, over 5 000 teachers were excluded as a result of this.
What a monstrous fraud! To suggest that the MDC did not win the election on
March 29 is intended to obfuscate the Zanu PF decline while stroking the
over-inflated egos of some who were severely defeated in that
election.

Their self-proclaimed mantra as kingmakers is a
by-product of this myopic indulgence. More importantly, it underlies a deep
and chronic contempt and disrespect for the people. It is the people that
decide their fate and not some overfed Google-addict sitting on a
table.

Politics is not a chess game of elaborate flip
charts.

A second fraud is to try and equate Tsvangirai with
Mugabe. This, with all due respect, is sick populism intended not to defile
Mugabe for he has done that on his own, but to ridicule and demonise
Tsvangirai and the MDC.

The attack is personal and is no
different from the daily diatribe of defamatory vituperations churned out by
the Herald. In short, to Mugabe and others, Tsvangirai is the red flag that
has generated anger and hatred of satanic proportions.

Is
it an accident that a rocket scientist can be so ahistorical and so
revisionist as to equate the sins of this regime with any other person? Can
the failure of this agreement be visited upon our
shoulders?

One thing has to be emphasised for the benefit of
those conducting the symphony of hatred and discord at Herald House.
Tsvangirai is the undisputed and incontestable leader of the MDC. Not only
that, he is the leader of this struggle. Every struggle has a face and a
leader.

For the record, it is Mugabe and his acolytes who have
been responsible for the castration of Zimbabwe's manhood. It is not
so-called sanctions that have created the phenomenal decline of this economy
to levels unheard of in modern economics. Now where does Tsvangirai fit into
all this? The answer is simple.

It is not Tsvangirai who is
frustrating the consummation of the unity deal but rather Mugabe himself. In
this regard, let's put into perspective the MDC position on the dying
dialogue.

There must be a satisfactory legal framework to
underpin the agreement. Secondly, there must be an equitable distribution of
ministerial portfolios. In short, responsibility with
authority.

Thirdly, the constitution and composition of the
National Security Council must be defined. This overseeing body is essential
to ensure the gradual weaning of state institutions from the breast of Zanu
PF.

Fourthly there must be an equitable and fair distribution
of key public positions including governors, ambassadors and permanent
secretaries.

Finally, there must be a reversal and cessation of all
breaches of the Memorandum of Understanding and the Global Political
Agreement.

This includes the unconditional release of Jestina
Mukoko, Gandi Mudzingwa and all abductees and the reversal of all executive
appointments unilaterally made after July 21 2008.

Surely
there is nothing extraterrestrial about these demands. In fact the demands
are a logical platform if not precondition for any viable Government of
National Unity.

Finally, a myth has been peddled that there is no
other strategy or option other than that of a GNU. This can only be a
Freudian dislocation. Dialogue and the GNU are the conscious by-product of a
roadmap we crafted in May 2006.

The substance is to achieve
democratic change in Zimbabwe through peaceful, democratic, constitutional
and non-violent means. To then suggest that this can only be achieved
through a GNU chaired by Mugabe is somewhat chronic.

In
short, we remain committed to the cause of change in Zimbabwe as we remain
committed to the GPA, subject to the resolution of our demands. However, we
are not so naïve as to allow Zanu PF to trap us in the cul-de-sac of their
sterile processes.

Comment: 2009 budget mission impossible

Thursday, 22 January 2009
20:24WHEN government this week set the maximum taxable income at $250
trillion a month, what sort of budget is it going to come up with next
Thursday?

It can only be in foreign currency if our bankrupt
rulers can produce the dollars to finance the budget.

Stand-in
Finance Minister Patrick Chinamasa will definitely not want to announce the
appropriation in Zimbabwe dollars.

It is not just the embarrassment
of stumbling over awkward figures laden with zeros (remember Samuel
Mumbengegwi struggling with trillions two years ago) but the reality that
the local currency has virtually ceased to be local tender.

Lack of confidence in the currency is seen by the degree of unofficial
dollarisation prevailing in the economy. We have seen the level of
unofficial dollarisation progressively undermining the domestic currency as
a store of value.

Chinamasa is well aware that while
announcing votes in foreign currency will roll easier from the tongue,
financing whatever budget will be a big task for a government struggling to
get foreign currency to buy basic stationery like envelopes and carbon
paper.

Chinamasa's budget next week is therefore a wish list of
government aspirations but also a realistic advertisement of the extent of
the crisis in this country.

Dominating his beggar's list should
be the vast amounts required for food imports to nourish 8,2 million,
according to government's own admission.

Vast amounts are
required to put health and education on the path to recovery. The civil
service wage bill in foreign currency will be staggering.

The
government will also need to spend billions in hard currency to repair
damaged public infrastructure, complete long-stalled capital projects like
the Tokwe Mukosi Dam and initiate new ones.

Just to fathom the
scope of the resources required, US$40 million will be required to pay 100
000 teachers at a conservative monthly pay rate of US$400. Unicef last week
provided US$5 million to pay health workers but that is the amount required
for just a month.

Industry has said it requires US$900 million
to raise capacity utilisation from the current low of 10% to 80%. In the
absence of credit from banks or balance of payments support, government is
expected to step into the void.

The huge task to hand for
the government is financing whatever budget it is going to
announce.

Traditional sources of financing the budget - corporate
and individual taxes, tariffs and excise duty - have lost substance with the
demonetisation of the local currency. Printing of money to support the
central bank's quasi-fiscal activities is no longer a sensible option
either.

Modalities of collecting corporate tax and Paye in
foreign currency are still being worked out.

Setting tax
brackets for foreign currency salaries is another taxing exercise due to the
absence of proper benchmarks in the new form of remuneration. Then there is
the parlous state of the banking sector to contend with.

The state of the sector is an important consideration for any economy moving
toward formal or informal dollarisation.

Successful dollarisation
requires full financial integration, as banks will now play a critical role
in the maintenance of monetary and balance of payments
equilibrium.

Whenever there is excess demand for funds banks should
be able to source them from abroad and if there is excess supply banks
should be able to invest funds abroad. Our banks are not sufficiently
integrated into the international financial system to provide adequate
support for dollarisation.

But even with international
integration, there is the issue of country risk in granting loans and
providing financial support for the connected banks in the dollarised
domestic economy.

Country risk depends on the perception of fiscal
viability and the ability to service debt. Zimbabwe has not fared well in
this area.

Figures aside, Chinamasa's budget speech must
clearly signal government's intention to create a low-inflation environment
and to make even more far-reaching fiscal and broader public sector
adjustments.

This is necessary to enhance investor confidence and
promote the restoration of long-term investment.

Essentially
dollarisation will require utmost discipline and responsibility in the
conduct of the public affairs of the country.

The country needs to
focus on programmes that offer the best returns. Wasteful programmes that
are designed to buy votes must be discarded. Focus must be on invigorating
economic activity to raise capacity utilisation in industry and on the land
in order to create employment.

Government finances would also
need to be put on a sound footing, and budgetary rules and practices as well
as general accounting standards within the public sector strengthened. The
government must be in a position to sustain revenue flows in line with
expenditure.

All this however requires prudent economic
blueprints underpinned by political stability. Otherwise the budget will
turn out to be another academic exercise with no positive impact on our
desperate situation.

Muckraker: Pesky Lensmen Victims of Crazed Bling Attack

Thursday, 22
January 2009 17:33TUCKED away inside the Herald in the final
paragraphs of its story on Monday's talks was a handy little disclosure by
"an insider".

It said that Morgan Tsvangirai had a bilateral
meeting with President Mugabe where he demanded that all political prisoners
be released and senior appointments in the public service made since
September be annulled.

Many will consider these to be entirely
reasonable demands and indeed the MDC-T leader would find it difficult to
persuade his followers of the need to join a unity government when innocent
people are being detained on spurious charges and torture routinely
practised, according to doctors' organisations.

But what
was of interest to us was the fact that the Herald, no doubt prompted by its
"insiders", had for weeks been telling us there was no chance whatsoever
that Mugabe would consent to a meeting with Tsvangirai because everything
had been decided last year in South Africa.

So didn't Monday's
tête-à-tête amount to a meeting? And weren't the concessions made on
gubernatorial appointments of any significance?

Nelson Chamisa,
by the way, should note when Mugabe's minions give confidential briefings to
the state press, and ensure the independent press is fully counter-briefed
so certain claims are effectively dealt with.

Anyway, it was
useful to know the next time we hear there is "no going back" that there
will be!

Does anybody recall the conciliatory letter Mugabe wrote
to Barack Obama congratulating him on his election victory in November?
Since then Obama has been under sustained fire from Mugabe's
publicists.

So what was the point of trying to open a
diplomatic door only to have your zealots making sure it remains firmly
closed? Admittedly there wasn't much prospect of success but it wouldn't
have hurt to have tried.

Meanwhile, we noted the following
paragraph in Obama's inaugural address: "To those leaders around the world
who seek to sow conflict, or blame their society's ills on the West: know
that your people will judge you on what you can build, not what you
destroy.

To those who cling to power through corruption and deceit
and the silencing of dissent, know that you are on the wrong side of
history; but that we will extend a hand if you are willing to unclench your
fist."

How can Jonathan Moyo write a lengthy defence of new
Attorney-General Johannes Tomana without once declaring an interest? He must
assume we all have very short memories.

Was Tomana not
Moyo's own lawyer who was imposed on the Media and Information Commission by
Moyo when he was Minister of Information?

Why did Moyo omit to
mention that connection? And what was Tomana's fate when Moyo lost his
job?A "false controversy" has erupted over Tomana's appointment, Moyo
claims, since Tomana declared himself to be a proud supporter of Zanu
PF.

Tomana has every right to belong to Zanu PF, Moyo says. In
today's highly charged political climate there is no Zimbabwean who does not
support Zanu PF or the MDC.

This is largely true. Tomana
has the same right of association that the rest of us supposedly enjoy. But,
as the government's chief law officer, he is also expected to exercise a
professional attachment to the rule of law. He needs the respect of the
profession if he is to work with it. Let's hope he earns
it.

Moyo claims Judge-President Rita Makarau's criticism of
lawyers was specifically directed at lawyers like Beatrice Mtetwa "who think
they have free licence to criticise anyone and everyone including harming
the national interest without being held accountable".

So
Tomana has a constitutional right to belong to the party of his choice while
Mtetwa is accused of "harming the national interest" by insisting that
individuals kidnapped and tortured have the right to the protection of the
law?

This would appear to be a selective approach to the
application of the law. And in what way is Mtetwa "harming the national
interest" by seeking judicial protection for those arbitrarily seized and
detained?

Why is she wrong to ask judges to uphold the law instead
of swallowing the dubious claims of the state which is waging a
not-so-clandestine war against the opposition?

Moyo suggests
that President Mugabe has no obligation to consult Morgan Tsvangirai on
appointments to the government or any other matter.

No, indeed
there is no obligation other than that of working together for national
recovery.

Why does Moyo think it is unreasonable for those who
are party to the September 15 pact to insist that Mugabe upholds the terms
that were agreed upon before they join the government? Why is it so
irrational to insist upon sincerity and conformity with the terms
agreed?

That includes upholding the rule of law and
discouraging your followers from attacking their opponents.

Moyo accuses Mtetwa of "scandalous" behaviour by claiming there was a
breakdown in the rule of law.

But isn't it the duty of
lawyers to point out where they think there has been a breakdown in the rule
of law?

And isn't that what much of the legal profession, and
indeed the country at large, believes given the apparent reluctance of
magistrates and judges to afford applicants the liberty to which they are
entitled?

Is Moyo seeking to take from us the right to
criticise court judgements? And how low must he sink to attract the applause
of his former colleagues?

He claims it is easy for "lawyers
like Mtetwa" to harm Zimbabwe's national interest because she is a Swazi
national.

Now that is a scandalous remark by any definition.
Why doesn't Moyo disclose a certain interest in dealing with Swazi nationals
before he fires off these cheap shots at others?

Moyo's
whole Sunday Mail article last weekend, first carried in newzimbabwe.com,
was clearly designed to advertise his availability for office. It will be
interesting to see what he gains from it.

Meanwhile, we were
interested to note Nathaniel Manheru giving Patrick Chinamasa his marching
orders on legislation to gag the Law Society.

"Where
self-regulation doesn't work, then direct regulation must come into play,"
he wrote last Saturday. It worked in the media profession, he claims despite
the collapse of nearly every state prosecution brought under
Aippa.

"Why not for the legal profession where cases of
misconduct clearly undermine public faith in the administration of
justice?"

"The ministry clearly watched a very dangerous
poacher turn herself into a game keeper at the Law Society of Zimbabwe,"
Manheru remarked in reference to Mtetwa.

"Instead of
fearing, the poacher is actually expanding her role, including creating and
dishing out phoney awards named after legal luminaries as happened just this
week."

While we should expect such malevolent remarks
from the likes of Manheru, we certainly don't expect Chinamasa to defend the
indefensible. He called Tsvangirai's demand for the rescinding of the
appointment of the RBZ governor and Attorney-General
"misplaced".

There was an urgent need to fill the two positions, he
claimed.

The governor of the RBZ had been playing a leading
role in fighting sanctions, Chinamasa said, while in the case of the AG,
there had been "an increase in banditry and insurgency and there was no way
the government could operate without such an appointment".

"It is to everyone's knowledge," Chinamasa claimed, "that MDC-T was
recruiting former soldiers and police officers for military training in
Botswana with the intention of removing the government."

Is
that so? Does the public in all seriousness believe these charges? Does
anybody? And what evidence can Chinamasa produce?

Don't we
recall similar charges about militia training (in South Africa) which
collapsed in the past? Don't we recall even before that episode the late
Justice Sandra Mungwira in 2004 describing as a complete fabrication state
evidence in the case of MDC officials in Bulawayo, whom Mugabe had labelled
terrorists?

The best response to Chinamasa's claims about MDC-T
training came from the Botswana authorities themselves. Why should a party
want to remove a government by force that it had already defeated at the
polls, they asked?

Chinamasa, it should be recalled, was a
casualty of that rout. Which may explain his need to lash out at the MDC-T
from time to time. But what he claims to be "everyone's knowledge" is
certainly not what he thinks.

As for Gideon Gono leading the
fight against sanctions, his role in promoting inflation by printing money
has been fully recognised.

He only joined the ruling party's
dishonest campaign to blame all their self-imposed troubles on "sanctions"
when the Australian government took steps against his children. That was
unfortunate.

But we never could understand why he should have
wanted, like Reason Wafawarova, to practise his patriotism in
Australia!

We were pleased to see our old friend Olley Maruma
occupying the slot in the Herald Letters column usually occupied by the
chief spokesmen of the regime masquerading as somebody
else.

He was dutifully attacking Eddie Cross for suggesting
there was a need for a change of driver on the bus of state. Maruma, rather
clumsily, attempted to translate this as a class narrative.

If Maruma wants to adopt this approach, he should explain to us why he took
full advantage of the hospitality extended to him by the British Council
recently.

He was spotted guzzling the enemy's booze and wolfing
down their snacks at a Chatham House function. Let's hope that apart from
this conspicuous consumption he managed to give a good account of
himself.

Somebody not giving such a good account of herself was
Grace Mugabe in Hong Kong last week. She reportedly lost her cool with some
pesky photographers.

A London Sunday Times photographer
claims he was beaten up and punched by the First Lady. She flew into a rage
when she was spotted last week leaving the exclusive Shangri-La Hotel in
Hong Kong, the newspaper said. She had been staying there with her
entourage.

"Holding a Jimmy Choo-style bag estimated to be
worth at least £2 000, and hiding behind Cavalli rhine-stone-framed glasses
with a red cashmere shawl over her head, she ordered her bodyguard to attack
the photographer, Richard Jones," the newspaper reported.

"While the bodyguard tried to wrestle away Jones' camera, she joined in the
assault.

"The man held him while she hit him again and again in
the face with her fists," the paper said. "She was screaming, completely
crazy," said Werner Zapletal, a tourist from Austria who witnessed the
incident.

Jones (42) suffered nine cuts, abrasions and bruises to
the face and head caused by the heavy, diamond-encrusted rings Mugabe was
wearing, according to a medical report by Dr Raymond Ng, a general
practitioner in Hong Kong.

During the assault more burly
bodyguards came running from the hotel but were intercepted by security men
from a nearby commercial building.

"Mugabe and her female
companion fled around a corner seeking to hide their faces, only to run
straight into a second photographer, Tim O'Rourke.

He snapped a few
pictures before she flew at him with her fists flying, pulled his hair and
tried to smash his camera. She then hurried back to her five-star
refuge."

The Hong Kong police, who were called to the scene,
detained the bodyguard. He was allowed to go after questioning. The police
took a statement from Jones.

The Sunday Times said officers at
the Tsim Sha Tsui police station will study CCTV footage of the incident
which they are treating as "serious" and "political". A decision on whether
to press charges is pending but Mugabe could claim immunity from
prosecution.

Grace flew to Hong Kong on January 9 and installed
herself in the £600-a-night Harbour Suite on the 18th floor of the
Shangri-La, according to the Sunday Times.

There she played
hostess to her daughter, Bona, who studies in the city, and to a stream of
relatives and friends. She rarely went out but other members of the party
were ferried around in black limousines costing £60 an hour, the paper said.
La Dolce Vita!

Editor's Memo: Summit a Test of Sadc Leaders' Sincerity

Thursday, 22
January 2009 17:26SADC chair Kgalema Motlanthe has a not-so-easy task
on Monday to save the faltering prospects of the formation of an
all-inclusive government in Zimbabwe.

Events of this week, when
mediation once again broke down, have diminished prospects of Sadc's success
in resolving the crisis here. The regional bloc's options are ebbing as the
problem has kept growing.

Sadc leaders have since March last year
held three extraordinary summits and three security summits in hopes of
forging a unity government. Monday's is the seventh.

The
meeting in Pretoria requires a different approach to unlock the
deadlock.

It is important for the regional heads to confront
fundamental issues of governance and the country's fast-degenerating human
rights record and not just pushing for the swearing in of a new
government.

The Sadc leaders have to realise that they are now
dealing with leaders who not only distrust each other but have also grown to
hate each other since September last year when agreement to form a unity
government was signed. It should not be business as usual for
Sadc.

The South African leader and his delegation came to
Zimbabwe this week with a plan they hoped would unlock the political logjam
and lead to the formation of a government of national unity.

This to them appeared like a simple task in which they expected MDC-T leader
Morgan Tsvangirai to immediately join the government of national unity and
then work with Mugabe to sort out a myriad of outstanding issues to do with
appointments of security ministers, governors, diplomats and other senior
government officials.

The plan was rejected by the MDC. The
proposals were always going to be rejected because according to the MDC they
failed to address issues which prompted the deadlock at the end of last
year.

The Sadc plan, according to the MDC, dovetails with the
aspirations of President Mugabe to continue holding onto power. This is the
curse of the Sadc intervention in Zimbabwe.

It has become a
cumbersome process in which Mugabe has domesticated the bloc to give an
impression that his rule has the endorsement of his peers.

Mugabe and his minions today believe they are running a legitimate show in
Harare backed by the region.

This is the connection that has
encumbered the regional leaders from achieving success in the
mediation.

The leaders meeting in Pretoria this week are
therefore not expected to achieve much as long as they believe that the Zanu
PF regime can be rehabilitated when Tsvangirai's MDC agrees to join the
GNU.

This is a hopeless position that has blinded the leaders to
egregious human rights abuses here. The silence is construed by our rulers
as loud messages of solidarity.

The Sadc summit is
therefore a serious test of the region's resolve to deal decisively with
abductions and alleged torture of Mugabe's political opponents by state
security officers.

At the meeting this week, Tsvangirai added to a
basket of unresolved issues which Sadc has to deal with the abductions and
alleged torture of his supporters.

The new demands for the
release of the MDC activists have been viewed in certain quarters as
vexatious and a ploy by Tsvangirai to stall proceedings. Why is he
introducing these deal-breakers now?

The issues he is raising have
nothing to do with the formation of an all-inclusive government, the
official line goes.

And this is how the Zanu PF regime gets
away with acts of impunity which have over the years resulted in the
democratic deficit we face today.

There are imprudent Zimbabweans
who have come to accept torture and abductions as normal inconveniences in
daily people's existence.

These excesses must be condemned. In
Pretoria next week, Sadc heads should address this issue as part of their
mediation. How does the region expect Tsvangirai to join a government in
which he is branded as the face of terrorism against the
state?

They must muster the courage to speak out not because
that is what Tsvangirai wants to hear but because they have a moral
obligation to straighten the ways of their peer.

They have an
obligation to set the standard of human rights in the region. This is what
will make the Sadc mediation relevant to the crisis to hand.

There is no denying that issues to do with the democratic deficit have been
at the centre of the conflict in Zimbabwe and it cannot be addressed by
merely sharing positions in government. It takes more than that. This is the
major task to hand for Sadc heads.

To tackle this issue,
the heads have limited options: to denounce Mugabe and risk losing his
attention altogether or to ignore Tsvangirai's bidding, which will then be
construed as an apt endorsement of Mugabe's projects.

Not
an easy call. But then nobody ever said doing the right thing was a walk in
the park.

Zim Independent Letters

Killing Zimbabwe's IndustryThursday, 22 January 2009 20:40
THE Reserve Bank governor seems to be trying his utmost to kill Zimbabwe
industry and at the same time make life untenable for the average Zimbabwean
with his selective application of companies being able to trade in single
currencies.

The requirement to license can only be assumed to be a
mechanism for the Reserve Bank to collect revenue from any forex traded and
not in the overall interests of the people of Zimbabwe.

We now
see shops selling South African goods and no local goods because they no
longer want to sell in local currency and Zimbabwean manufacturers are not
allowed to sell in forex.

Again this can only be so the Reserve
Bank can keep tabs on how much it is owed in forex irrespective of the
hardship it causes the country and ordinary people.

Many large
and small companies have not traded for several months or have been trading
at sub-economic levels and are unable to raise any forex let alone the US$20
000 needed to register, so they are in a Catch 22 situation -- cannot
register to sell in forex so cannot get back on their feet, again all
because the Reserve Bank wants its pound of flesh.

The
requirement to register first before trading in forex has meant a lot of
companies are in limbo as they wait for approval, or otherwise, and are
rapidly losing the market to South African suppliers or those that have been
registered.

Obviously those who are turned down or are unable
to afford to register would best be advised to close shop forthwith as
continuing in Zimbabwean dollars cannot be sustainable in the face of South
African competition and the unknown value of the Zimbabwean
dollar.

If the Reserve Bank governor really had the interests
of the country at heart he would allow everyone to trade in the currency of
their choice and try to tax them the best he can -- not that it is his job
but the Minister of Finance's anyway.

Consumers are also
not spared. The lucky few who have forex are not able to buy local products
like milk and vegetables from some shops while the unlucky ones cannot get
most things, even mealie meal, as they do not have any forex, although they
may have loads of Zimbabwean dollars.

Again, if the Reserve
Bank allowed all retailers to maximise sales they would sell in both
currencies, a realistic Zimbabwean dollar rate would soon emerge and all
levels of society would be able to buy the things they need in the currency
they have access to -- and fuel coupons being forced on us as a currency is
just plain madness.

A McCormick,Harare.

-------------------

Media Registration Fees Assault on Press
Freedom

Thursday, 22 January 2009 17:24
THE gazetting of exorbitant media application and registration fees by the
Zanu PF government represents a determined assault on press freedom and the
constitutional right of Zimbabweans to receive and impart
information.

The Media and Information Commission (MIC)
recently announced increases of up to US$4 000 for foreign media journalists
to operate in the country and up to US$32 000 to establish offices in the
country.

The increases are four times more than those of
last year.

The MDC is strongly against these punitive
regulations, which are an attempt by a dying regime to silence the remaining
small but vibrant media in the country.

Since the
enactment of the draconian Access to Information and Protection of Privacy
Act (Aippa) in 2002, the Zanu PF regime has made every effort to make it
difficult for journalists to operate in the country.

As a
result hundreds of journalists have been forced to flee the country while
several independent media houses and broadcasting stations have been
closed.

The punitive registration and accreditation and
registration fees represent the lack of sincerity on the part of Zanu PF to
the Global Political Agreement (GPA) signed by the three major political
parties on September 15 2008.

All parties agreed,
under Article 19 of the GPA, that freedom of expression has to be guaranteed
in the country.

The exorbitant fees being touted means that
press freedom has been dollarised, much to the detriment of ordinary
Zimbabweans who are starving for information.

Access
to information under the Constitution of Zimbabwe and international law is a
basic human right.The MDC believes that press freedom is a basic
canon for any democracy.

Only rogue regimes have the
reprehensible penchant to stifle media freedom in order to prevent
journalists from peeping into crevices that would expose misgovernance and
graft.

The MDC believes in a Voluntary Media Council
where journalists conduct their own affairs without government
interference.

Press freedom is the people's freedom.
Zimbabweans deserve heir place in a true democracy.

MDC
Information and Publicity Department.

--------------

We Expect Better Coverage
Thursday, 22 January 2009 17:06I APPRECIATE your quest to
provide us with news that is accurate and up-to-date with regards to the
Zimbabwean situation.

However, you are found wanting on the
issue of your coverage of the impasse between the MDC and Zanu PF. All we
read are analysts predicting doom to the MDC-T if it does not join the
government regardless of the fact that it is getting a raw
deal.

We must not forget that the MDC is the party that won
the credible elections of March 29.

I visited the MDC
website and found an opinion poll in which 52% of the 21 599 respondents
stated that Morgan Tsvangirai must not join the GNU. 48% said he
must.

I wonder why you do not factor in opinion polls in
articles. When the US presidential election race was in full swing your
columnists factored in results from opinion polls describing George Bush's
unpopularity.

It is my belief that Bush is a true
champion of democracy. He is the one along with his father who did something
to end the atrocities Saddam Hussein was perpetrating when the rest of the
world had a business as usual approach to the
catastrophe.

The conflict in Iraq is a result of those who
were feeding from Saddam's patronage. The fruit of US invasion can be
witnessed in northern Iraq where the Kurds welcomed the
intervention.

The area has witnessed phenomenal growth after
the removal of Saddam while the militias in Tikrit blast each other
senselessly.

Can we then say it was better to have a
tyrant because of the actions of a few?

Llodza,Glen View.

-----------------

The Role the Judiciary Must Play in
SocietyThursday, 22 January 2009 16:59BOTH the
editorial comment and Candid Comment in last week's edition (Zimbabwe
Independent, January 16-22) were spot on.

As a contribution
to a long overdue debate on the role of the judiciary in Zimbabwe,
especially in post 2000 Zimbabwe.

I can do no better than
furnish you with the following pearls of wisdom from Alfa Modibo Belgore,
the former Chief justice of Nigeria, and the late Michael Corbett, one of
the greatest Chief Justices that South Africa has
had.

Chief Justice Alfa Modibo Belgore: "Since 1960 there
has been nothing wrong with the constitution. The operators, the elite, are
making terrible encroachments into the constitution. Our elite are very
selfish people. The constitution is a very sacred document but our people
don't respect it."

"The executive might transgress,
the legislature might become unruly but it has always been the judiciary
that has stood the test of time by standing firm on the side of truth and
justice."

Chief Justice Michael Corbett -- Ideal Qualities of
a Judge:

Knowledge:

A judge should have a
sound knowledge of the law and the practice of the courts. Under our system
of very limited specialisation, a judge may sit in criminal sessions, motion
court and civil division where the cases coming before him may involve any
of the aspects of private law, administrative law or complex commercial
topics such as bills of exchange, insolvency, company law and intellectual
property.

Experience:

In the ordinary
running of a trial, the judge must have a vast well of experience from which
to draw. During the course of a single day, he will inevitably be called
upon to give many rulings on procedure, the admissibility of evidence, the
conduct by counsel of their respective cases and so on.

In many such instances, the judge must know, almost instinctively from his
experience, what to do.

In addition, to some extent a trial
judge must exercise a guiding and restraining influence over the course and
conduct of the whole trial, at the same time maintaining a position of
impartiality and neutrality.

Judgement:

This quality relates both to fact-finding and to
the application of the law to the facts. He must have the knowledge and
experience of the world and its ways to make a good assessment of the
probabilities and to weigh them correctly.

He must be
endowed with common sense. In applying the law to the facts, in those many
areas where a decision has to be made as to whether in a particular
situation, certain conduct is fair or reasonable, in other words, where
value judgements have to be passed, similar qualities of judgement, common
sense and understanding are demanded.

Independence:

The judge must be beholden to no one. He must
be not only willing but also unflinching in his resolve to decide cases in
whatever way his professional skills and his conscience direct him, whatever
the consequences and however unpopular his decision may be in certain
quarters or indeed generally.

He must be objective,
unbiased, unattached to any preconceived notions or philosophy which would
tend to make him take sides or take an unduly severe or lenient view of
certain types of conduct.

He must, in a sense, stand aloof
from the society in which he lives while, at the same time, being acutely
aware of the realities of that society as well as its moods, values and
mores.

Character:

The judge must have the
personality and temperament to maintain order and dignity in court
proceedings.

He must be patient. As the legal process is by
its nature a slow and somewhat ponderous one, the judge must be prepared,
within reason, to give the parties full rein.

He must
approach every case with an open mind and , although he will inevitably form
certain views and impressions during the course of the trial, he must keep
that open mind until the end.

He must be a good listener.
Interventions in the course of hearing evidence should generally be
restricted to the elucidation of matters which are not
clear.

During counsel's argument, the judge may, and indeed
should, put his difficulties to counsel and, in that way, test the validity
of counsel's submissions.

However, he should not entre
into a wrangle with counsel or try to persuade him that his submission is
incorrect or, except in extreme cases, try to silence counsel on a
particular line of argument.

Industry:

Judges have an enormous workload. Current crime waves overload the criminal
rolls. The growth and development of the economy and commercial activity, in
general, have resulted in a steady increase in the volume and complexity or
civil litigation coming before the courts.

In the
circumstances, all judges have to be extremely industrious. They have not
only to work for long hours, often in the evenings and over weekends but
they have to see to it that they produce, with minimum delay, what the
parties have come to court for; a judgment.

The importance of
the truth of the old adage that justice delayed is justice denied cannot be
emphasised enough.

A judge must have the ability to
suffer, with dignity and in silence, the slings and arrows of the critics,
some of whom, regrettably, seem to find it unnecessary to read the court's
judgment.

Indeed, misrepresentation of the decision of the
courts, mainly by the fourth estate such as the media, has in recent years
posed a significant problem n many countries.

It is not,
for one moment, suggested that the decisions of the courts should be immune
from criticism, or that, in a general sense, judges should not be
accountable to the public.

However, criticisms should be
based upon fair and accurate reporting of the judgment and not upon slanted,
distorted or incomplete versions of what the case is all
about.

By the same token, it is equally important that the
dignity and authority of the courts should not be undermined, especially by
criticism that has no factual foundation.

The question
which the public who, as you elegantly described them are the most competent
jurors in the efficacy of the bench, must ask is whether or not the members
of our judiciary measure up to the ideal qualities of a judge set out
above.

Zanu PF lost last
March's elections and yet they are clinging to power -- where are the
African leaders then? Analysts talk about the effect of sanctions on the
economy but leave out the effects of a corrupt government on the welfare of
its citizens. Zimbabwe is in this state because of misguided policies and
corruption.

Mhofu.

AFRICAN "brotherhood
and solidarity" has been of no help to us Zimbabweans. The likes of Thabo
Mbeki along with Robert Mugabe are responsible for the mess we find
ourselves in. Were it not for pressure from the West these power sharing
talks would not be happening and all our African "brothers" would be doing
is shielding Mugabe from being chastised at the UN and AU.
Observer.

THE little foreign currency Zimbabweans had saved
as a hedge against inflation is being gobbled by these foreign currency
shops whilst they are unable to access their hard earned but now useless
Zimbabwean dollars.Concerned.

WHEN Gideon
Gono came onto the scene he boldly stated that failure was not an option. I
wonder how he classifies his tenure at the RBZ which is an unmitigated
disaster. When he accepted reappointment for another term we all knew it had
nothing to do with his professional qualities and abilities but
hispliability to Robert Mugabe's demands.
Annoyed.

Please bring back Sudoku now? This is getting
frustrating.Diva Dollar.

I THINK that in the
previous academic year students did not learn anything. They should just
repeat.Mukwirimba.

THE issue of the late
release of last year's school examination results is just an excuse for not
opening schools because there are no teachers to teach even those students
that did not write any examinations. Opening the schools without the
teachers is just wasting money unless we want to just send our kids
away.Concerned Parent.

I FAIL to understand
why all schoolchildren have been stopped from going to school, when it is
only last year's Grade 7's, O'level and A'level students who are need
results to be able to go to the next level. Surely the rest of the students
can continue with school.Perplexed.

I BELIEVE
that the MDC cannot allow being made a junior partner in this power sharing
arrangement. If Robert Mugabe does not want to let go of some strategic
posts - in which he has failed - then let him form his government. Let him
sort out the mess that he has caused himself.
Analyst.

INSTEAD of coming up with suggestions of strategies
to kick out Zanu PF by these analysts and commentators all we hear is
condemnation of MDC leader Morgan Tsvangirai. Did he vote for himself or was
he not voted for by the majority of Zimbabweans?
Bemused.

IT'S scary to imagine that Zimbabwe now wants to use
the US dollar and South African rand when production in farms and industry
is almost at zero percent! Our country needs fresh minds at the helm and
also people with humility. The current crop of leaders is too arrogant to
make any meaningful change for the people of Zimbabwe. We are drowning in
sewage and they refuse to acknowledge this.
Observer.